'Middle ground' fix would lower car-tab taxes, protect ST3 projects

The next few days at the state capitol could prove crucial to lowering your car-tab fees.

A Washington state senator from Lynnwood has introduced a proposal that he considers to be a reasonable, middle ground fix to the recent fury over rising car-tab fees to fund Sound Transit . He says it would lower car-tab taxes without undermining Sound Transit 3 (ST3) funding and projects throughout King, Pierce, and Snohomish counties.

"I think the idea is how do we pay for light rail, something that is really important to the region, and how do we do it in a fair and cost effective way that doesn't overly burden taxpayers," said Sen. Marko Liias, D-Lynnwood. 

His proposal would require Sound Transit to establish a Market Value Adjustment Program.

The program would provide taxpayers a credit equal to the difference between the MSRP-based formula Sound Transit currently uses to calculate car-tab fees and a more updated formula based on a car's fair market value.

For example, the owner of a 2012 Honda Civic would pay $148 under current law. Under Liias' proposal, that person's bill would drop to $106. That's a savings of $41.

Similarly, the owner of a 2015 Toyota Camry would pay $233 for tabs under current law. Under Liias' proposal, the bill would drop to $180. That's a savings of $53.

Liias said his plan would offer refunds to drivers who have already paid their car-tab fees and would lower car-tab fees for all drivers moving forward.

"It would be about $30 to $50 off the bill, and that's per year. So over the course of five or 10 years, that's real dollars that people will get back," said Liias.  "This is for all taxpayers, all cars, and it moves them to a more fair market value system, gives them a credit, and makes the system fair for everyone."

Equally important, he said addressing pricy car-tab fees in this way would avoid a huge revenue loss for Sound Transit. 

The agency has said other proposals being considered in Olympia would result in a $6 billion hit that could delay the light rail projects voters approved in November under Sound Transit Three.

Liias estimates his proposal would cause a $780 million revenue loss for Sound Transit, but says $518 million of that would be mitigated by diverting money from the Puget Sound Taxpayer Accountability Account.

That's the part of Liias' plan that Senate Republicans don't like.

To understand why, they say you have to understand what the Puget Sound Taxpayer Accountability Account actually is.

The state's 2015 transportation package that included legislative authority for Sound Transit Three contained a provision that increased the state sales tax that Sound Transit must pay on construction of ST3 projects.

The $518 million sales tax payment to be made by Sound Transit is currently dedicated to an education fund for Pierce, King, and Snohomish county governments.

Specifically, state law says the three counties could use that money to improve educational outcomes in grades Kindertarten through 12th and fund higher education for kids that are low-income, homeless, or in foster care.

"I don't want to take money to help Sound Transit from this vulnerable group.  That doesn't make sense to me," said Republican Senator Dino Rossi, R-Sammamish. 

Senator Steve O'Ban, R-Pierce County, agrees.

"Homeless children should not pay for this inflated value to make things right for Sound Transit.  Sound Transit has the funds within its own treasury to pay for this.  They're raising $54 billion over the life of ST3," said Senator O'Ban.

Upon hearing that concern from Republican lawmakers, Senator Liias said he'd be willing to look at other ways to fund the tax credit, outside of the Puget Sound Taxpayer Accountability Account.

"We may not rely on that mechanism," said Liias.  "I'm still listening to people about the best way to fund the credit.  The thing I'm focused on is making sure that taxpayers see their MVET bills go down.

Senators Rossi and O'Ban have proposed their own bills, several of them, that seek to hold Sound Transit accountable and change the way the agency calculates car-tab taxes. 

But some Democrats have said Rossi and O'Ban's proposals are too aggressive.

"Most of the things I've seen coming out of the Senate are just a way to take Sound Transit apart, and that isn't really what we're trying to do.  People voted to do these projects," said Representative Judy Clibborn, D-Mercer Island.

Clibborn chairs the House Transportation Committee, and has said she couldn't get behind a bill that would cause a $6 billion hit to Sound Transit projects and revenues.

She does, however, support Senator Liias' new proposal.

"I'm much more into getting a solution to what people are complaining about, which is the difference in the valuation of their cars.  I think Senator Liias' bill is a really good vehicle for that.  It is well thought out."

She says House Democrats are now crafting a bill using the same type of language that Senator Liias used.

"I think that's where we're going to put our effort," said Clibborn.

That means this middle ground fix to the fury over car-tab fees will likely be debated in both the House and Senate in the next few days.

A spokesperson for Sound Transit said are currently analyzing the proposal, to see how realistic it might be.

© 2017 KING-TV


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